Global factors keep returning again and again to haunt our markets. Just when we believed that we are de-coupled from global markets, we had a sharp dip due to a Trump win in November, 2016. De-monetisation also added to the market’s woes. 2017 started on a low and has seen a steady recovery to near all-time highs. The past few weeks saw confidence return to domestic markets. Investors were aggressively deploying capital in domestic equities without much worry. Markets kept rising right through February. The previous F&O settlement closed firm and the next one too opened on a strong note. Domestic fund flows are currently at all-time highs.
But, are market participants sure of a further rise in equities? While there is enormous amount of hope and positivity among market players, one does not see too much confidence. There is no discernible consensus either. The focus clearly will shift to global factors and what happens in global markets will influence our market’s direction in the coming weeks. The results of France’s election will affect global market sentiment especially if Le Pen wins. The political results in India’s largest state, Uttar Pradesh will also have a bearing when they release on 11, March, 2017. The markets are set to have a somewhat tentative fortnight and will take a clear direction only after putting these outcomes behind.
“Buy not on optimism, but on arithmetic.” – Benjamin Graham